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Australia's worst buy in military hardware might be the Anzac-class frigates. The last frigate will be completed 15 years after the first, so all the communications equipment bought at the beginning is now out of date. But competition is fierce. There's the $1billion spent on second-hand Seasprite helicopters - with airframes America used in the Vietnam War - still grounded by software problems.

Money alone - $6 billion - would make the Collins-class submarines a contender. They were too noisy and couldn't carry the torpedoes bought for them. Then there's the $1.2 billion spent developing an "over-the-horizon" radar that arrived last May - almost five years late.

It's also hard to go past the new Bushranger utility vehicle the army is attempting to build. The prototypes were 10 times less reliable than the army thought acceptable. But the army took the vehicle anyway because the only other vehicle trialled was twice as bad again.

What is clear, however, is that taxpayers who pay for blown budgets and blown time schedules are usually the last to find out. "When these projects get off the rails, I think we would all acknowledge they get off the rails in a very big way," the WA Liberal David Johnston told the Senate.

And so it was with a certain sense of deja vu that the Defence Minister, Robert Hill, released two months ago the latest plan to keep Australia safe from its enemies until 2014. It involved spending another $50 billion. The future, said Hill, would be filled with the buzz of robot surveillance planes, new air warfare destroyers and aircraft that were so futuristic that they existed only on paper.

The public version of the Defence Capability Plan was 190 pages long. But buried under mountains of elaborate graphics, pie charts and confusing military-speak was a familiar story. There was no precise detail.

The estimated spending on each project varied so widely that the combined difference between the lower estimates and higher estimates was more than $13.6 billion. To put it into context, that is enough to cover the NSW Government's commitment to health care and hospitals for the next 18 months. Even Federal Parliament, it seems, struggles with the fine print.

Current arrangements have the Defence Department reporting to cabinet only twice a year, and then on only the 10 most expensive projects, as well as "projects of concern". The definition of concern has never been fully explained.

General scrutiny by the public is confined to the department's annual report, which lists the 20 most expensive projects. But the information is scant. "Australia's weapons acquisition process is a very complex, closed system with lots of material not available to the public for 'security' reasons," says Alan Hinge, author of the book Australian Defence Preparedness. "Defence has a monopoly on technical access; a monopoly of knowledge which makes public scrutiny and questioning of weapons acquisitions very difficult. Even the American system is considerably superior to ours in that Congress is able to vet comprehensively what Defence puts up."

A long line of public inquiries - the latest a series of hearings by the Senate Standing Committee on Foreign Affairs, Defence and Trade - has spelt out the lack of external accountability.

The committee was told Australia also lags 20 years behind Britain when it comes to accountability. This is how long the British Ministry of Defence has been providing a mandatory annual report to parliament on major defence contracts. For the past 10 years, the British National Audit Office has been using that information to provide independent assurance to taxpayers in the form of an annual review.

No such scrutiny exists in Australia.

And when the Senate last year asked that such annual reports be made mandatory, it was overruled by the Government. The Tasmanian Liberal Senator Eric Abetz delivered the message on October 9: "The Government notes that there is already substantial scrutiny of the defence acquisition program by the Auditor-General."

But the truth is that five years have passed since the Auditor-General last provided a major overview of big ticket defence spending. That 1999 report, on the management of major equipment acquisition projects, was scathing. It revealed "systemic problems" involving more than 200 projects worth almost $43 billion. "Often when we do these audits, we run into the accountability and measurement issues before we ever get to the basis of whether the project was realistic in the first place," Warren Cochrane, a senior audit officer, later told the Senate.

Another senior audit officer, Michael Watson, said poor record-keeping by the department made it difficult to comprehend where projects were at. "One of the issues there is that, because of their data integrity and data recording issues, we have to actually belt the numbers around to get to the bottom of it," he said. "We have to actually drill down ... It is time-consuming to get to the bottom of whether or not the numbers coming out of the systems are accurate numbers."

The Senate also heard from former defence personnel. "My principal criticism of current reporting arrangements is that they provide insufficient information as to how projects are progressing or how well they meet their objectives," said retired Rear-Admiral William Rourke, a former head of navy purchasing. "There has not been adequate feedback to designers, to builders and to taxpayers in regard to project outcomes. There is some need to learn from the past and it is not evident that this is occurring."

Joe Moharich, a former group managing director of a major contractor, Helitech Industries, said the "lack of transparency in and the total secrecy" in the way business was conducted by the department gave rise to "allegations of poor judgement and at times incompetence".

MANY attempts have been made to fix the problems over the years, the most radical in July 2000 when the Federal Government melded 12 different defence buying departments into one giant organisation, the Defence Materiel Organisation (DMO). Mick Roche, a former Customs Service official, was put in charge of the new unit. A behemoth, it contained 5500 public servants and 2700 military personnel. In simple terms there were about 30 managers for every major project, with a wages bill of $600 million a year. This excluded further costs of more than $40 million a year in outside consultants.

But one of those consultants, Andrew Gabb, who until recently worked inside the DMO, said the culture of the organisation made it difficult for ordinary staff to bring problems to light. He claimed parts of the DMO were now "so dominated by a culture of bullying and rule-by-fear" that it wasn't safe to suggest that decisions or initiatives might be wrong. "The people in the DMO are often forced to work in an environment that is not very helpful before it starts. A lot of these big decisions appear to be made by senior people or they are brought [about] by political decisions."

Gary Brown, a former parliamentary staffer and now senior consultant to a private security think tank, Stratwise Strategic Intelligence, said many projects were thrust upon the DMO by the Federal Government. "There needs to be a constant light of high-level scrutiny to keep Defence on track," he said. "[But] at the top of the tree is political will."

Last June Roche quit as head of the DMO, after reportedly clashing with Hill. The departure came just weeks before the results of yet another inquiry were made public, this time a Government-appointed probe headed by an Adelaide industrialist, Malcolm Kinnaird. Kinnaird said the outcomes from defence spending were not always what the taxpayer or the Government had a right to expect. "Cost overruns have led to pressure on the financial resources available for defence. In some instances major capital equipment has been delivered to the services many years after its planned introduction," he said. "There needs to be more change; it [Defence] needs to be more rapid and more fundamental in reshaping systems, structures and organisational culture."

The Government hunted in the private sector for a new saviour for the DMO. In February, it found Stephen Gumley, a former Boeing executive and former head of the Australian Submarine Corporation. One of the first things he has done is to review the contracts themselves, arguing that the organisation needs to be "less bureaucratic and more businesslike".

Gumley has stated the terms of new contacts will be tightened and old ones enforced. "Change is a continuous process. We have made excellent strides over the past three years but we are part-way through the journey ... We are going to become more assertive. The thing I want to achieve most is projects delivered on schedule because then our war fighters get their equipment on time."

CONTACT THE HERALD The Herald would like to hear from readers willing to share information on this issue. Gerard Ryle can be contacted on (02)92822347 or gryle@smh.com.au